WHY WASN'T HE DEPORTED ON THE VERY SAME DAY THAT HIS APPLICATION WAS REJECTED???

Because the application, which was rejected, was for citizenship, not stay visa. He was already a “permanent” resident, so naturalization rejection meant that he would not be a citizen, but he would still remain permanent resident.

What should have happened was that his green card should have been revoked as soon as the FBI investigation began. I can guess that the FBI screwed up the investigation, so they left him alone. The record remained, thus his naturalization rejection.